1. (U) Summary. The Ministry of Economy and Finance (MEF)
recently made available a draft expropriations law
formalizing procedures for RGC confiscation of land for
public projects. At the same time, the MEF, with counsel
from an Asian Development Bank (ADB)-sponsored East-West
Management Institute (EWMI) consultant, announced it is
drafting a subdecree creating procedures to assess the social
and economic impacts of land confiscations; they expect the
subdecree will be passed by the end of 2007. Both drafts
were a surprise to the NGO community which decries the
legislation as an attempt to legitimize contentious RGC land
grabs. The EWMI consultant has defended the MEF's work and
questions whether NGOs should play a defining role in the
draft process as they now demand. NGOs doubt RGC good
intentions on land issues, attributing positive movement to
cognizance of an upcoming Government-Donor coordination
meeting and the run-up to the 2008 national elections. End
summary.

THE LAW AND THE SUBDECREE
-------------------------

2. (U) The Ministry of Economy and Finance (MEF) recently
made available a ten-page draft law on expropriation that
sets broad guidelines on land-taking procedures for public
interest purposes and defines public interest activities.
The law leaves specific land-taking procedures up to
subdecrees but it lists fifteen types of activities
considered in the public interest, such as construction of
infrastructure projects, development of buildings for
national protection and civil security, construction of
facilities for research and exploitation of natural
resources, and construction of oil pipeline and gas networks.
One article of the law states compensation for dwellers of
non-titled locations or on public land -- squatters -- will
include payments for the cost of moving residence or damages
but not for the cost of the land. According to an East-West
Management Institute (EWMI) technical advisor, an
expropriations law has been in the works since 2004 and this
draft comes out of a drafting committee established in
January 2006.

3. (U) The MEF appears to be more actively working on a
44-page draft subdecree, entitled "Sub Decree on Addressing
Socio-Economic Impacts Caused by Development Projects,"
institutionalizing compensation procedures when the RGC
expropriates land for purposes serving the general public or
national interest. The Asian Development Bank (ADB) has been
sponsoring a technical advisor, Patricia Baars, through the
East-West Management Institute (EWMI) since June 2005 to
assist the MEF in drafting the subdecree. Baars and the MEF
organized an all-day national consultation workshop on May 21
for national- and local-level government officials to discuss
the draft subdecree. Government participants included senior
ministers, secretaries of state and other high-level
officials from nine ministries, and 22 provincial and
district governors. A few, select NGOs were invited to
attend the conference for their input and involvement in the
discussion.

BUT NGOS LIKED THE OLD LAW
--------------------------

4. (SBU) NGOs find it problematic that they and the public
have not been a part of drafting either piece of legislation.
Legal aid NGOs, such as the Community Legal Education Center
(CLEC), fret that new legislation will codify current land
acquisition practices that uproot what are already some of
Cambodia's most vulnerable people. High-profile land
grabbing cases involving RGC officials are unfortunately an
increasing part of the human rights NGO caseload in Cambodia,
so interest in any new legislation is to be expected.
Currently, CLEC relies on the Land Law of 2001 to push for
fair compensation packages for their disenfranchised clients
who have been controversially removed from land. The 2001
law does provide compensation and some protections for
citizens faced with evictions and losing land. The battle,
NGOs say, has been enforcement and implementation of the law.
Naly Pilorge, Director of local human rights NGO LICADHO,
worries new legislation would override the existing land law
pushing legal cases on behalf of poor, evicted residents back
to square one.

5. (SBU) Baars told Poloff laws governing compensation
procedures are necessary while the government continues to
undertake development projects that require land acquisition
and relocation of homes and businesses. Further, the MEF

PHNOM PENH 00000741 002 OF 003

officials with whom she has been working have good
intentions, claims Baars. She explained a section of the
subdecree defining land use in the public and national
interest that specifically excludes projects with purely
economic development goals, including increasing tax
revenues, creating employment, and general economic growth.
If implemented, this article of the subdecree would be
critical -- NGOs claim the RGC confiscates land in the name
of public projects but the land is actually intended for
private gain. She points out the new subdecree's definition
of "public interest," standards for taking land from
indigenous communities, and stipulations on affected
residents "who have no legal rights to the land," are all
based on the existing land law. Baars believes the draft
subdecree compensation plan is so generous that the MEF's
biggest problem will be finding the funds to ensure
compensation meets the committed amounts. Despite NGO
disagreement, she feels the drafting of this law is a good
exercise for the officials involved. Baars maintains that
the MEF has taken the subdecree seriously and she believes
they have made a good-faith effort to write a fair law.

QUESTIONS RING ABOUT NGOS' ROLE IN THE PROCESS
--------------------------------------------- -

6. (SBU) Baars told Poloff she had always intended to
include a two-week public comment period in the subdecree
drafting process but that phase had been overcome by events.
NGOs were blindsided when they heard about the subdecree
three working days before the national consultation workshop,
but eventually ADB and the MEF agreed to allow NGOs to
participate. By the time Poloff met with ADB Senior Social
Development and Resettlement Specialist Marla Huddleston and
Baars mid-day on May 21, Huddleston was consumed with anger
-- during morning sessions, NGO participants openly
questioned the RGC's intent in drafting the subdecree.
Huddleston angrily told poloff that NGOs were lucky to be
involved in the draft subdecree process at all because the
government usually does not include NGOs on other legislative
processes. (Note: Contrary to this statement, the RGC has
opened public comment periods and accepted ideas from civil
society on past legislation such as when the government
included NGO suggestions in amendments to the existing
election law prior to the 2003 elections. End note.) The
NGOs and the MEF have now agreed to a three-phase public
comment period: first, NGOs have until June 22 to submit
comments on the draft subdecree; next, the MEF will have two
to three weeks to take comments into consideration and will
call a meeting with three to four representative NGOs to
discuss (roughly July 8); finally, the NGOs will have until
July 24 for any follow-on comments. Although they agreed to
the calendar for comment, the NGOs then decided to boycott
the afternoon sessions of the workshop. In a private meeting
the following day, Baars told Poloff that government
officials in attendence did not even notice the NGO boycott
and that she suspects they also were unaware of the extent of
NGOs' distress over the issue. She said she was unhappy
about the long public comment period, which would never be so
long in a U.S. law-drafting process. The NGO demands for a
voice during the entire drafting process is unrealistic -- no
government relinquishes its role in drafting laws to NGOs.

A POSITIVE TREND IN LAND DISPUTES?
----------------------------------

7. (SBU) Land grab cases throughout Cambodia are continuing
with no apparent slowing in the number of cases recorded by
NGOs. On a positive note, the Council of Ministers is
forcing Suy Sophan (a powerful local businesswoman and
alleged to be connected to Hun Sen's father) and her
development company (Phanimex) to give up their disputed
claim to land by the Royal Palace in Phnom Penh. The Council
of Ministers ordered the Ministry of Interior to find Suy
alternative land. The current draft of expropriation land
legislation has the potential to be a sign of improvement, as
well. However, Yeng Virak of CLEC believes the positive
moves are just an attempt for CPP popularity gains before the
2008 elections. Naly Pilorge at LICADHO suggests the RGC
wants to appease donors in advance of Government-Donor
consultations in June.

8. (SBU) Comment. The MEF is generally viewed by NGOs and
the international community to be one of the more competent
ministries of the RGC. Despite this, NGOs we talked to are
pessimistic about the impact the new legislation will have on
land-grab cases. If NGOs can offer realistic, constructive
input during the subdecree public comment period, the MEF's
response to comments will be a good indication of their
willingness to ensure a fair law for Cambodia's poor who are
displaced by land grabs.

PHNOM PENH 00000741 003 OF 003

9. (SBU) Comment continued. Regarding the negative NGO
reaction to the draft legislation, the ADB has no one to
blame but itself for the dilemma in which the Bank finds
itself. The RGC went out of its way to court NGOs and the
opposition, Sam Rainsy, in joining the still-moribund
national Land Dispute Authority, as the government realized
that NGO buy-in would be crucial to the Authority's success.
That, and the strong NGO role in supporting victims of land
cases should have made the ADB sensitive to the NGO
community's likely reaction to an ongoing drafting proccess
to which they were not privy. End comment.
CAMPBELL

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